The Press is Wrong. It’s Not About the Millennials!

In most instances the media coverage of financial technology and robo-advisors has been overwhelmingly accurate. But what the media has gotten completely wrong is this: It is not just a story about the Millennials.

It is certainly true that part of the excitement surrounding fintech and robo-advice services are their
appeal to non-traditional clients such as the younger clients of Generation Y and Z with fewer assets
to manage, but this has been overplayed. Millennials currently make up a fraction of clients for most
firms and they don’t have the lion’s share of wealth.

Much of today’s wealth is concentrated among the baby boomer generation savers who make up
the overwhelming bulk of the assets at banks, wealth managers and advisory firms. This
demographic will need ever more advisory services in the retirement and asset-distribution phases
of their lives. This technology revolution is clearly for them as well.

The movement of the elder generation into digital life continues to deepen. They are increasingly
becoming familiar with technology and reliant on it. A study by Pew Research found that higher
income seniors use the internet and broadband at rates approaching the general population. It also
found that once seniors join the online world, digital technology often becomes an integral part of
their daily lives.


Another study (Jefferson National) found that the majority of early adopters use robo-advice for
baby boomer clients. Consider that two-thirds of Vanguard's Personal Advisor Service customers are nearing retirement age or are already retired, while approximately half of Charles Schwab's Intelligent Portfolio customers are older than 50.

The FinTech story is clearly about serving and adding value for all clients across the entire
demographic spectrum better whilst massively compressing margins. Wealth-tech provides clients
with greater convenience, less headache, and allows them to keep more of their money by paying
less. These points are undoubtedly not just the wish list of young customers.

James Lindsay


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